RBI, FinMin share ‘mature relationship’, says Jaitley

Amid speculation about a possible second term for Reserve Bank Governor Raghuram Rajan, Finance Minister Arun Jaitley today declined to be drawn into the matter, but said there is a “mature relationship” between the central bank and the government.

“As far as the Finance Ministry and RBI are concerned, there is an institutional relationship between the two. It is a very mature relationship. We at the highest level at the two institutions have discussion and each other views is considered between us,” he said.

He was speaking at an event organised by Indian Women’s Press Corps. To a question whether Rajan is getting an extension, he quipped “these are not issues which we discuss through the media.”
Rajan’s current three-year term as RBI chief is ending this September.

Indicating his interest in a second term, Rajan on May 13 had said he has enjoyed every moment of the job, but there is “more to do”, despite calls from some sections of the ruling BJP against any extension for him.

Senior BJP leader Subramanian Swamy last week had suggested that Rajan should be removed and accused him of being responsible for “unemployment and collapse” of industrial activity.

“In my opinion, the RBI Governor is not appropriate for the country. I don’t want to speak much about him. He has hiked interest rates in the garb of controlling inflation that has damaged the country… The sooner he is sent back to Chicago, the better it would be,” Swamy had told reporters outside Parliament.

Rajan, who had earlier also served as the Chief Economist of IMF and is known as a key commentator on financial issues globally, is the on-leave Professor of Finance at University of Chicago’s Booth School of Business.